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Signs your retirement plan is in trouble Estate planner shares tips for avoiding disaster during the ‘distribution’ years

Written by Curt Whipple. Posted in Senior Living

Published on July 04, 2015 with No Comments

“Almost no one foresaw what happened that year and I doubt very much that many will foresee a collapse if it happens again.” --Curt Whipple, veteran financial advisor

After the 2008 economic meltdown when the stock market fell 37 percent, veteran financial advisor Curt Whipple said he met with clients from outside financial institutions who’d lost 50 to 60 percent of their portfolio in a single year.

“Almost no one foresaw what happened that year and I doubt very much that many will foresee a collapse if it happens again,” said Whipple, a Certified Wealth Strategist, Certified Estate Planner and CEO of C. Curtis Financial Group.

“Regardless, there are indicators that you can focus on that will help you identify whether or not you’re taking too much risk in your portfolio and if your retirement plan is in danger.”

Whipple, who recently published “Retiree Lifeline! How to Get Government Out of Your Pocket,” a retirement planning guide, reviews the danger signs from 2008 to watch out for in 2014.

You either looked at your accounts every day OR you wouldn’t look at them at all. In 2008, people couldn’t believe what was happening to their portfolios. They looked at their account every day – an exercise in masochism – as their advisors told them either, “just hang in there,” or reminded them that the market is a long-term investment that cyclically rises and falls. That advice led them to stop looking at their accounts, which was as bad as looking at them every day, as their advisor told them to just hold on.

You lost more than 15 to 20 percent of your investments’ value in 2008. That indicates you had too many risky investments. It’s important to know what level of risk you’re comfortable with – generally speaking, the younger you are, the riskier you can be. However, risk is also a personal decision. Make sure you and your advisor are on the same page regarding risk tolerance. That will require your advisor taking the time to explain your investments and how they’re diversified.

Your broker or financial advisor fails to call you regularly. You should get a call every quarter from your advisor to review and discuss your account. The only time this should not be the case is if you specifically request to be contacted less frequently.

Your portfolio is tied mostly to Wall Street or stocks, bonds and mutual funds. If each investment you have is one or all of the above, then your investments are not truly diversified. In addition to those investments, you should consider alternative investments like Real Estate Trusts (REITS), and your accounts should feature some kind of guarantee.

You depend on your bond portfolio to protect you in hard times. We are living in a new financial era; bonds now have an inverse relationship to interest rates, which are so low now that they will invariably increase in the future. As interest rates rise, bonds will decline in value. That’s why using bonds as your only alternative to a falling market is a dangerous idea.

You excessively worry about money. Your fear may be based in reality if you have a number of risky investments; if you really don’t understand what you are invested in; or if you don’t have a clear plan to achieve your financial objectives.

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About Curt Whipple

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All opinions, conclusions or recommendations expressed are those of the author and do not necessarily reflect the views of The Chronicle. Curt Whipple, Certified Wealth Strategist (CWS) and Certified Estate Planner (CEP), is chief managing partner at the C. Curtis Financial Group, which he formed in 1986. For more information, visit ccurtisfinancial.com

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